Donating a Car

Choose Your Charity Carefully

You can donate your vehicle to any charity or organization you want, as long as that charity or organization takes vehicle donations. You are the vehicle's owner, after all. However, you're probably seeking two outcomes to the donation:

1. The warm, fuzzy feeling that comes from helping others.
2. A tax deduction.

Therefore, you're going to want to make sure the Internal Revenue Service (IRS) recognizes the charity as a "qualified charity."

Tax Deductions Explained

In Publication 4303, A Donor's Guide to Car Donation, the IRS explains in detail the donation and tax deduction processes. DMV.ORG has, of course, outlined the highlights below for your quick reference.

Finding Qualified Charities

The IRS allows you to search for charities online that can receive tax-deductible donations. If you choose a charity included in the online version of Publication 78 you can deduct the donation when you file your taxes.

Note that not all organizations that can receive tax-deductible donations are included in Publication 78. The IRS has set aside a separate section for them: Eligible Donees Generally Not Listed in Publication 78.

Restrictions, Limitations, and Other Such Tax Rules

Naturally, there are restrictions and limitations when it comes to such large tax deductions as vehicle donations. For example, you can't deduct more than 50% of your annual gross income.

When it's time for you to prepare your tax return, you can find details about each limitation in Publication 526, Charitable Contributions.

Your Vehicle's Fair Market Value

In addition to not equaling more than 50% of your annual gross income, your deduction can only equal the amount of your vehicle's fair market value. Fair market value is not always the same as the full Kelley Blue Book value, because you must take into consideration the condition of your vehicle.

Publication 561, Determining the Value of Donated Property, helps you find the fair market value of your vehicle.

All the Paperwork

Publication 4303 provides a handy chart that explains all paperwork and the situations in which you'll need each form.

Depending on your situation, you may need:

• The charity's written acknowledgment of the donation.

• Form 8283 Noncash Charitable Contributions.

• A qualified appraiser's written appraisal of your vehicle.

Notifying the WV DMV

Good news: You don't technically need to notify the WV DMV when you donate your vehicle to charity, nor do you need to complete much paperwork. Simply sign the back of your title as the seller, have the charity sign as the buyer, and go about your merry way.

Additional Resources

The IRS is always available to help you understand both the car donation and the tax deduction processes. Visit them online, or call them at (800) 829-3676.

Also check out the following resources:

• National Association of State Charity Officials (NASCO)

• West Virginia Charity Offices

• National Association of Attorneys General